Financial Glossary

J-curve: Theory that says a country's trade deficit will initially worsen after its currency depreciates because higher prices on foreign imports will more than offset the reduced volume of imports in the short-run.

Jensen index: An index that uses the capital asset pricing model to determine whether a money manager outperformed a market index. The "alpha" of an investment or investment manager.

The execution and clearing of orders by one member of a stock exchange for the account of another member. For example, investment dealer A is a small firm whose volume of business is not sufficient to maintain a trader on the exchange. Instead it gives its orders to investment dealer B for execution and pays a reduced percentage of the normal commission.

Joint account: An agreement between two or more firms to share risk and financing responsibility in purchasing or underwriting securities.

Joint clearing members:
Firms that clear on more than one exchange.

Joint venture: A project undertaken by two or more parties to achieve a mutual objective.

Jumbo loan:
Loans of $1 billion or more. Or, loans that exceed the statutory size limit eligible for purchase or securitization by the federal agencies.

Junk bond: A bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower is a junk or high yield bond. Such bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poors and Moody's investor Services, provide the rating systems for companies' credit.

Junior Bond Issue: A corporate bond issue, the collateral for which has been pledged as security for other more senior debt issues, and therefore ranks behind these prior claims.

Junior debt (subordinate debt):
Debt whose holders have a claim on the firm's assets only after senior debtholder's claims have been satisfied. Subordinated debt.

Just-in-time inventory systems: Systems that schedule materials/inventory to arrive exactly as they are needed in the production process.